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The Comcast-NBC Merger: What Now?

January 26, 2011
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californiaprogressreport.com
By Samuel S. Kang

The Federal Communications Commission and the U.S. Department of Justice recently moved to allow Comcast’s acquisition of NBC Universal, despite the concerns raised by many organizations and individuals. The good news is that we won important concessions, but serious concerns remain.

This merger results in the consolidation of the nation’s largest cable company and broadband subscriber, Comcast, with the nation’s oldest broadcast network, NBC. For many reasons, this is a merger unlike any other. In his lone dissenting vote, FCC Commissioner Michael Copps put it simply, “Comcast’s acquisition of NBC Universal is a transaction like no other that has come before this Commission—ever.”

Efforts and Results

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Greenlining has been working diligently on this issue since rumors of the merger first surfaced in 2009. Since then, and with the help of many others, Greenlining vigorously advocated to make sure that the merger would protect consumer choice, small business opportunities, diversity in the media, and fair competition. We met with FCC Commissioners and their staff countless times, formed national coalitions, intervened formally at the FCC, met several times with the Justice Department, and even testified before Congress.

Thanks to these efforts, some of these goals were realized. Comcast has either been ordered or agreed to the following:

Voluntarily report its supplier diversity data to the California Public Utilities Commission, starting this year.

Diversify its board of directors.

Offer low-cost broadband services to modest income households and freeze the price of its “economy” broadband service for three years.

Adhere to net neutrality principles so that the shows you watch won’t be disrupted if you’re not a Comcast customer.

Expand news and local content for select NBC and Telemundo stations.

Greenlining advocated for all of these. We didn’t get everything we wanted, but these steps are significant.

Worst Case Scenario?

Greenlining believes that a consolidated Comcast-NBC could present limitless potential for underserved and diverse communities across the United States. However, there is much doubt that this potential will be realized.

For example, Commissioner Copps warns that this merger “confers too much power in one company’s hands.” He goes on to say that the consolidation of these two giant media entities “further erodes diversity, localism and competition—the three essential pillars of the public interest standard mandated by law.” If his worst fears are realized, the Comcast-NBC merger could be “a damaging and potentially dangerous deal.”

Unfortunately, Commissioner Copps may be correct. Although his criticisms present a worst case scenario, that scenario could come true. For example, a similar merger between AOL and Time-Warner disintegrated and took over a decade to fully unravel. If Comcast-NBC follows this path, the impact would be disastrous – because, as Mr. Copps explained, this merger “reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land.”

For better or for worse, the new Comcast-NBC behemoth may have become “too big to fail.” If it does fail, consumers, viewers and internet users will all feel the impact—severely.
What’s Next?

This is why the new Comcast-NBC company must collaborate with its customers and small businesses as no company has ever done before. The scale of customer and small business collaboration must match the unprecedented magnitude of the new company.

The company is quite capable of doing this if it so chooses. Comcast’s supporters and adversaries both agree that the company mounted a campaign for approval the likes of which have never been seen by even Capitol Hill veterans. Comcast and NBC also garnered the support of hundreds of organizations across the country.

The evidence is overwhelming: When it wants to, Comcast has the ability to move mountains. The Comcast-NBC media giant now has the opportunity to do even more. The question is, will it?

The answer may be that it has no choice. Comcast-NBC may have to step up to the challenge. This is because Comcast has voluntarily entrenched itself into a national web of regulatory obligations through this merger. Local, state, and federal authorities will all be watching Comcast very closely. As FCC Commissioner Mignon Clyburn stated, “I will be watching closely with my large megaphone in hand should these agreements be ignored.”